High-Speed Rail: Malaysia to Invest US$ 43 bn by 2020 on Major Projects

Interview with Dr. Noormah Mohd. Noor, CEO of Express Rail Link (ERL)

First, what is your conservative estimate of the whole investment necessary to fulfill the strategic development of rail transportation in Malaysia?

The government has invested about 50 billion in funding for the development of rail infrastructure, since 1990. The Prime minister announced last year that they would spend another 160 billion Ringgits until 2020.

What is your overall assessment of the transportation sector, especially the railways?

Well, we have come a long way in public transportation. In 1990 when the government initiated and implemented the improvement of public transportation, especially in the urban areas, in Kuala Lumpur specifically, they awarded four railway privatization projects. ERL is one of the rail privatization projects. The other three are mainly in the Metro.

Along the way, in order to have better integration for the Metro, the government took over the three metro projects and integrated them.

Before then it was three different lines of Monorail and Light Rail transit. ERL is still the only privatized project, a very successful privatized project. We run a dedicated line from the airport to the city center. We also run a commuter service that stops at three intermediate stations.

Where do you see investment opportunities for the rail transport sector for international, western companies?

In the west, the railway industry has been developed for a long time. You have hundreds of years combined railway experience among the western world. In that time, the west has started railways and improved on them. There has been a lot of innovation. I think there are many investment opportunities for western companies in the rail sector in Malaysia and south East Asia. We are the emerging markets and we are improving our rail sector. We have been lucky in south East Asia. In Southeast Asia, some countries have done better than others have but we are still developing the rail industry. Therefore, there are many opportunities for western companies.

What are your main priorities for the next four years?

I already mentioned that we run a dedicated service from the airport. Internally, we are trying to improve our services. We are currently working on maintaining our current record.

We have a reliability of 99.7% on- time performance.

That is excellent service by any standard. We have to make sure that we continue to maintain this reliability. We will try to improve customer service, of course. We continue to innovate. It is part of how we do it in our company. With a view to improving the rail sector as a whole, apart from improving urban transportation, the government has also announced the high-speed train project between Kuala Lumpur and Singapore. That would be one of our priorities at ERL. We are waiting for the tender to be announced next year and we will compete for that project.

What is your major challenge?

The biggest challenge in improving the rail system in Malaysia, not just for us, is that we have so many ongoing projects. In Kuala Lumpur there are the extension lines for the LRT and the MRT. In addition, the high-speed rail will happen soon, with a completion date of 2020. The biggest challenge is always finding skilled workers, skilled employees. The government recognizes this problem as well. We have lost a number of skilled staff to other parts of the world. Rail companies in Singapore, but especially in the Middle East are poaching our staff. That is our biggest challenge.

How do you promote Kuala Lumpur as a business interest destination?

Overall, in the larger picture, Malaysia is encouraging a lot of business. Last year we had a growth of about 4.7%. This year we expect about 4.5 to 5.5%. I think we are achieving about 5 to 5.5%. So there is a lot of opportunity, there’s a lot of growth. The government has also set up a one-stop agency to help with the processing of business set-up. In addition, I think Malaysia is ranked something like the fourth friendliest place to do business. As for tourism, last year registered a very good number. Unfortunately, this year, what happened to Malaysia Airlines has been a big setback. However, we have seen a lot of tourism. Our small contribution to that is to ensure that a passenger getting off a flight will have a pleasant journey to their final destination. We have products that offer door-to-door service. We have products for people who want to visit only Kuala Lumpur, if they are only transiting here.

How can the public sector improve the transportation sector?

The government took the initiative of forming a Land Transport Authority. The land Transport Authority is now the agency that overlooks the whole transportation plan. They have come up with a master transportation plan for Malaysia that looks at the requirements of the user, the operator and what else needs to be done to improve transportation in Malaysia, not just Kuala Lumpur. Of course, Kuala Lumpur is the most thriving city and a lot of it is concentrated here but at the same time, throughout the country.

The high-speed train from Kuala Lumpur to Singapore is one of their main tasks, to make sure the project is completed by 2020. When ERL built the tracks, we built with a view to this expansion, to Singapore.

I have been fortunate to have been working on this project since more than ten years ago. However, the economic conditions were not so encouraging then. Now, the two governments have agreed that this project will be a game changer for both countries. It is good news for us. We are waiting to be one of the potential bidders for this project.

What do you think will be the economic impact of this project?

It is huge. The Land Transport Authority has been tasked with the feasibility study. They did a pre-feasibility study. The government has agreed that is an important project. Singapore has also agreed. It is important for both countries. The two prime ministers have spoken and made an announcement together. The project is going to be implemented. As for the costs, from information in newspaper report, we know it 40 billion. It is going to be a catalyst to economic growth. It will spur new economic activity. There will be new townships. Some town may be transformed into the textile industry, education and other areas will be spurred on the road to Singapore. There will be tremendous economic growth.

Where are you looking for potential partners, international experience and modern technologies?

Our train was a partnership that we built with Siemens of Germany. We have been running that for the past 12 years. Excellent product, I must say. The western world is where the modern technologies in rail are. There are requirements like rolling stock, overhead catenary line, track works, telecommunications, etc. However, it must be said China is an emerging market that is very competitive in technology, price especially, production capacity and delivery times. They can actually produce faster, cheaper and in a shorter time. They have done it domestically and now they are looking for business abroad. I think the west has advanced technology but in terms of price, China would be more competitive. I have seen a lot of cooperation between western and Chinese companies. China has many technology partners from Europe, Bombardier with Alstom; with Siemens, they collaborated to develop the train. Now China is now also exporting their own products.

What about your specific expertise, something that differentiates you from other companies that provide this link from the airports? Do you have any benchmarks, any innovative services or products that you sell that we would not be able to find anywhere else in the world?

Dedicated airport rail is a very niche market. There are only 24 airport links in the world. The Metro serves the public. We are serving airport passengers. The market, the business is different from the Metro market. Serving airport passengers is not an easy task because airport passengers have a different expectation regarding service. After coming off a flight, they want equivalent service. So we have to make sure that we provide them a seamless experience. As I mentioned there are only 24 dedicated airport links. We have received a number of international recognitions. We won the Best VIP Customer Service 3 years ago. It is a dedicated door-to-door service. That was in 2010.

In 2011, we won the Air Rail Link of the Year Award. In 2012, we won the Environmental Commitment Award. In 2013, we received another Airport Rail Link of the Year Award. These are international recognitions given by the Global Air Rail Organisation. We are very proud of those achievements.

As for innovation, to be competitive and in order to sustain the business, we have to innovate. One of our innovations, aside from our marketing strategy, is how we reach international passengers to Malaysia before they leave their homes or offices. We have improved our ticketing system. You can book and print your ticket online, we have a very good eCommerce channel and we have a mobile App for Android and iPhone. You can present your ticket as a QR barcode on your phone. Therefore, when you get here, you do not have to worry about exchanging currency etc. you can simply go to the gate and board our train with the barcode. I think we are the first airport rail to have this. You have many options. You can buy the normal smart card at the counter, buy a ticket at a self-service kiosk, you can have a printed barcode, you can buy online or through your phone, and you can flash your Visa payWave at the train. These are the innovations we have effected this year.

What makes the Air rail link the best way to get from the airport to the city? Why not taxis or other services? Why use you?

We provide convenience, especially from KL Central. The most important thing we provide is reliability. People know our train is very reliable. As I mentioned, our on time performance is 99.7%. That is world class standard. Probably Hong Kong has 99.9% but we are second only to them. That is very important to the business traveler. They know exactly how long it takes from here to the airport, which is 28 minutes by train. On top of that, they can check in at KL Central. We offer four airline check ins for 5 airlines – Malaysia Airlines, Emirates, Royal Brunei and Cathay Pacific and Etihad. That is another excellent service that we offer. You know exactly when you will get to the airport. People do plan their trip accurately depending on our trains, sometimes doing their check in online. We provide a convenient, fast and reliable service.